Problem Statement: The problem addressed in this case study is the question of what marketing mix to use to increase Reliance Baking Soda’s (RBS) profit by 10% in 2008. The marketing mix solution must evaluate the effectiveness of consumer and trade promotions and also address the complex interaction between them.
To help evaluate the value creating opportunities for RBS the
following analysis were conducted: Strength, Weakness, Opportunity, and Threats (SWOT – Exhibit 1); and Porter’s 5 force analysis (Exhibit 2).
As seen in the SWOT analysis, the biggest asset for RBS is its loyal customer base and historically strong brand awareness leading to a strong market share (70% for RBS). This translates to a high supplier power for Reliance. Advertising baking soda as an allpurpose cleaner to its established customer base is a good avenue for Regnante to achieve the 10% profit goal. For a historically cheap product, a large customer base with frequent purchases to allow for multiple usages is extremely important to help the product’s entry into different areas of the house.
RBS Case Analysis continued
However with low barriers of entry for baking soda, threat of competition from lower priced private labels, and moderate to high buyer power due to excessive reliance on trade promotions, Reliance should also focus on a gradual and incremental change on this dependence, so as not to alienate its channel partners and the sales forces who are dependent on bonuses directly linked to the quota they sell.
With a focus on growth and the proposed two-pronged approach: increase adverting to the customer base directly and reduce dependence on volume sales through trade promotions, the following segmentation is proposed:
Women with families
Time with the family
Easy access to product
Value base access
Time and family safety
Decisions based on
Since these three segments differ in their needs, RBS would need to customize its value proposition for each segment differently. A distribution strategy based on these segments geographical locations and customizing local coupons at the distribution channels – local grocery chains would likely increase sales for RBS and increase foot traffic to these local distribution channels.
Group O – Industry 2
RBS Case Analysis Continued
Segment 1- Family Based Business Model: Women with family’s values time and safety of her family. With the repositioning of RBS as a non-toxic all-purpose cleaner and offer promotional coupons to incentive the purchase, RBS would potentially keep this segment engaged on the value of time and efficiency derived from the use of RBS for their multipurpose use.
Segment 2 – Networking Based Business Model: Singles primarily value networking opportunities to grow their business and personal circle. This segment would constitute occasional usage and would not purchase a lot of the product.
abandoning this segment, Reliance should determine if this segment’s usage and geographical locations correspond with their distribution channels and thereby making them attractive to the distribution channels.
Segment 3 – Golden Years Business Model: With time as not a limiting factor, the primary incentive for this segment is value driven purchase. With the seamless value of price and all-purpose cleaner, all packaged with a historically trusted label, RBS can create a unique value proposition for this segment.
Users in segment 1 and 3, with an underlying need for time/efficiency and value, respectively, these segments would likely constitute the core customer base for RBS.
Target Segment: With a great opportunity and need for...